LIVE: Increase in rental tax credit and additional energy credits among measures announced in Budget 2025
Minister for Finance Jack Chambers TD with Minister for Public Expenditure and Reform Paschal Donohoe TD. Photo: Leah Farrell/© RollingNews.ie
The rate of carbon tax is to increase by €7.50 per tonne as part of Budget 2025, Paschal Donohoe has confirmed.
Carbon tax is applied per tonne of carbon dioxide emitted by carbon fuels.
It will bring the total Carbon Tax revenue to €951 million, the minister said.
“Half of this amount will be invested in improving the energy efficiency of our homes, an additional €89 million compared to 2024,” he added.
He said the carbon tax will fund €306 million of Social Protection spending next year.
Paschal Donohoe said the Government will increase capital funding for the Department of Environment to more than €1.14 billion to tackle climate change.
Warmer homes funding will reach “record levels”, around 10 times the funding provided in 2020.
The minister said: “Funding will support up to half of the cost of energy efficiency upgrades being met by the State, complemented by State supported loans.
“To support our farmers in becoming more environmentally sustainable, over €716 million is provided in 2025 for those participating in agri-environmental schemes."
Paschal Donohoe said the Government was investing more than €1 billion in programmes run by the Department of Enterprise, Trade and Employment.
He said added capital funding would be provided to the IDA (Industrial Development Agency) and almost €7 million in extra funds would be directed to the department’s regulatory bodies and agencies.
Mr Donohoe announced a €170m Energy Subsidy Scheme for hospitality and retail businesses.
A Budget package worth €3.9 billion was unveiled for the justice sector.
As part of this spending, there will be an extra 1,000 gardaí and 150 garda civilian staff.
Paschal Donohoe said the extra funding will allow for up to 350 additional staff for the Irish Prison Service, as well as investment in prisoner care and rehabilitation.
An additional 400 staff will be hired in the international protection processing system.
An additional €7 million will be spent on support for victims of domestic and gender-based sexual violence.
Paschal Donohoe said he was allocating almost €380 million to arts and culture.
€1.27 bn for @DeptCultureIRL in #Budget2025, an increase of 6% on last year:
— Catherine Martin (@cathmartingreen) October 1, 2024
🟢€226m for tourism including €61.4m for marketing to continue to promote Ireland domestically & overseas
🟢record funding of €140m for @artscouncil_ie pic.twitter.com/2k0gSreEjv
He said €170 million in support would be offered to Gaeltacht communities.
The minister said €226 million would be provided to the tourism sector and €328 million to media, including €6 million for the independent broadcasting sector.
He said €231 million would be directed to the sports sector.
Paschal Donohoe said €472 million would be given to the Department of Rural and Community Development.
He said the department would have a total capital budget of €235 million in 2025 to support the “revitalisation” of rural Ireland through a range of programmes and initiatives.
Strong transport infrastructure is necessary for connectivity and Ireland’s climate ambitions, the Public Expenditure Minister said as he allocated €3.9 billion to the Department of Transport.
Minister @Paschald says that a strong transport infrastructure is necessary for both connectivity and for our climate ambitions, and that a connected Ireland is a forward-facing Ireland #Budget2025 pic.twitter.com/vaThaaKBsl
— Department of Public Expenditure (@IRLDeptPER) October 1, 2024
In addition to increasing capacity on existing routes, this includes the extension of free public transport for children aged between five and eight as well as a new Coast Guard search and rescue contract.
Mr Donohoe said the overall figure will also include almost €1m per day in cycling and walking infrastructure and a continuation of the 90-minute fare and the young adult public transport cards for 19 to 25-year-olds.
"Additionally, I am pleased to announce that a financing agreement has been reached between the Port of Cork and the Ireland Strategic Investment Fund to extend the Port’s quay-side berth at Ringaskiddy," Mr Donohoe said.
"The agreement, a €99 million financing package, will allow the Port of Cork to develop multi-purpose infrastructure capable of meeting the requirements of the offshore renewable energy sector.
"The agreement marks a significant milestone in our ongoing commitment to deliver a greener, more sustainable future."
Separately, €2 billion was allocated to the Department of Agriculture for a range of schemes.
Mr Donohoe said: “The Department of Agriculture, Food and the Marine will also administer over €1.2 billion of EU funding in direct payments to farmers.”
The minister said more than €3 billion was also being set aside between 2026 and 2030 to invest in climate transition.
He said that would be used to support designated environmental projects that could assist with reducing emissions, improving air quality, or improving biodiversity.
The Department of Housing has been given €7.8 billion for a range of measures including €2 billion towards 10,000 new-build social homes in 2025.
Some €680 million of that overall figure will be allocated to schemes which Public Expenditure Minister Paschal Donohoe said would support the delivery of 6,400 affordable homes.
Mr Donohoe said an “unprecedented” €1.6 billion will continue to support 66,000 social housing tenancies alongside an additional 7,400 social homes next year, as well as 38,000 social housing leases already in place.
It will also bring 10,000 new households under the Housing Assistance Payment and Rental Accommodation Schemes in 2025.
Government will provide an additional €1.7 billion for more homes, schools, for improvements in hospitals, and to tackle climate change under the National Development Plan.
Minister for Public Expenditure Paschal Donohoe said that to date, 500km of new walking infrastructure, 170km of new roads and the expansion of rural public transport has been delivered.
He said that the additional investment will include €400 million in the National Broadband Plan.
Minister @Paschald announces funding under the National Development Plan to build more homes, schools, hospitals and transports options #Budget2025 pic.twitter.com/tOboIYPrHu
— Department of Public Expenditure (@IRLDeptPER) October 1, 2024
In relation to the €14.1 billion of Apple back taxes, Paschal Donohoe said it was vital to make the best use of the funds in the long term.
He said the money would be invested in four “strategic investment pillars” – namely water, electricity, transport and housing.
“Investment in these areas will support the needs of our people, assist in growing our economy, and help in meeting our climate and nature goals,” he said.
The minister said officials in his department would begin work on developing an investment framework for using the Apple funds, ensuring there was co-ordination with investments already planned through the National Development Plan.
Among the headline measures in health Budget 2025 includes funding for a range of new measures which Mr Donohoe
said will "increase access, affordability and capacity in our health service", including;
- The introduction of 495 new beds to the health service across hospital and community services
- Additional home support hours
- Support for women’s health measures, including increased access to IVF and Hormone Replacement Therapy free of charge.
Paschal Donohoe said it was an ambition for Ireland to be one of the best countries in the world to be a child.
He announced that two double payments of Child Benefit would be paid to all qualifying households in November and December. He said there would also be a double payment of the Foster Care Allowance.
The minister said a €400 lump sum payment would be made to recipients of Working Family Payment later this year.
He said a €100 lump sum would be paid to recipients of Qualified Child Increase payments.
The minister said a total of €8.3 billion would be allocated to the Department of Children, Equality, Disability, Integration and Youth. He said investment in early learning and childcare would increase to nearly €1.4 billion.
He said funding for the National Childcare Scheme would increase by a further 44%.
The minister said there would be a €336 million increase for Disability Services.
He said the Tusla budget would be increased to €1.2 billion.
Budget 2025 contains a €1.2 billion social welfare package “targeted to those with the greatest need”, the public expenditure minister has announced.
It includes a €12 increase to weekly social welfare payments.
In addition, Paschal Donohoe said the Carer's Allowance Means Test disregard will be increased to €625 for a single person and €1,250 for a couple.
Minister @Paschald announces a social protection package for 2025 targeted to those with the greatest need #Budget2025 pic.twitter.com/VX62BaEmkH
— Department of Public Expenditure (@IRLDeptPER) October 1, 2024
Parent’s payments have increased by €15 while the increase for a qualified child weekly rates have gone up by €4 for under 12s and by €8 for over 12s.
The hot school meal programme will extend to all primary schools in 2025, including a pilot-programme for school holidays.
Mr Donohoe also announced the “baby boost” payment, where parents of a newborn are given an additional double child benefit payment in the first month of the baby’s life.
The minister also said there will be a double payment of social welfare payments for 1.4 million people in October.
In education, Public Expenditure Minister Paschal Donohoe said the student contribution will continue to be reduced by €1,000.
Funding will also continue for the continued school-transport fee reduction and State exam fee waiver.
Meanwhile, the student assistance fund will receive additional funding and the post-graduate tuition fee contribution will be increased by €1,000 for the student grant recipients.
The Government will extend the Free Schoolbooks initiative to all transition and senior cycle pupils, Paschal Donohoe has said.
“Today, I am providing funding to extend the Free Schoolbooks initiative to all transition and senior cycle pupils in recognised post-primary schools within the free education scheme," Mr Donohoe said.
“Education is one component in ensuring a thriving population.”
A capital allocation of €1.3 billion will support 350 building projects currently under way as well as a further 200 new school projects.
He said that Budget 2025 provides for 768 additional special education teachers and 1,600 more special needs assistants.
Mr Donohoe said: “Building on the success of keeping childhood smartphone free, initiative, 2025 will see the rollout of supports to allow post primary schools to do just that throughout the school day.
“This policy will support the wellbeing of our children and provide them with the best possible environment for learning.”
Public Expenditure Minister Paschal Donohoe has allocated more than €4.5 billion to the Department of Further Education.
Addressing the surplus in the National Training Fund, Mr Donohoe told the Dáil that an almost €1.5 billion package will be used to fund schemes under the remit of the department as well as development and decarbonisation.
He said the six-year package will include a €150 million yearly increase to higher education for measures such as additional healthcare and veterinary places, as well as PhD stipends.
Minister Donohoe announced an energy credit of €250 for all households, which will be paid in two instalments – one before the end of the year and the other in 2025.
A further €300 lump sum payment will be given to fuel-allowance recipients in November, while a bonus €200 will be given to those who receive the living-alone allowance.
An extra €400 will also be given to those receiving Carer’s Support Grant, Disability Allowance, Blind Pension, Invalidity Pension and Domiciliary Care Allowance in November 2024.
He said the budget sets out a “positive path for the future while striving to meet the needs of today”.
Public Expenditure Minister Paschal Donohoe has just taken to the floor of the Dáil chamber to deliver his speech.
A domestic tax is being planned for next year on e-cigarettes.
The tax will apply to all e-liquids at a rate of 50c per ml of e-liquid and will come into effect in the middle of next year.
To support public health policy, Minister @jackfchambers has announced a new domestic tax on e-cigarettes. The tax will apply to all e-liquids. #Budget2025 pic.twitter.com/GvnUAWVdqN
— Department of Finance (@IRLDeptFinance) October 1, 2024
The cost of a pack of 20 cigarettes will increase by €1, with a pro-rata increase for other tobacco products.
It puts the price of a pack in the most popular category at €18.05.
Minister Chambers said it supports public health policy to reduce smoking.
The Minister for Finance has confirmed that he will increase the rate of stamp duty on bulk buying of homes from 10% to 15% with immediate effect.
Jack Chambers said the move will “discourage significant purchases” of houses by investment funds.
Making the announcement in the Dáil, Mr Chambers said that he shares the concerns of aspiring home owners that the bulk acquisitions of houses impacts on the number of houses made available to purchase.
Mr Chambers said he will also increase the rate of stamp duty to applicable to residential property valued above €1.5 million to 6% with effect from Tuesday night.
The finance minister also confirmed he will extend the bank levy for a further year, with a target yield of €200 million.
“It remains appropriate that the sector continues to make a contribution to the Irish economy following the support they received during the financial crisis.”
Announcing an increase to the vacant homes tax, Mr Chambers said it is important that the country maximises the use of existing housing stock.
"Therefore I have decided to increase the rate of the Vacant Homes Tax from five to seven times the property’s existing base Local Property Tax rate. The increase will take effect from the next chargeable period, commencing this November.
In relation to the Benefit-in-Kind (BIK) regime for company cars, Mr Chambers said he is extending for a further year the temporary universal relief of €10,000 to the Original Market Value (OMV) which was first introduced in 2023.
"For an employee with an electric company vehicle, they will have an overall BIK relief of €45,000 in 2025 which comprises of the €35,000 electric vehicle specific relief (already in legislation) plus the additional temporary universal relief of €10,000.
"I am also providing for a BIK exemption for the provision of electric vehicle chargers at the home of a director or employee," he said.
He said relief for mortgage holders introduced in the last budget is being extended for another year to help with the increase in interest paid by homeowners in 2024 over 2022.
Mr Chambers also said the relief for pre-letting expenses for landlords is also being extended, continuing for a further three years until the end of 2027.
Mr Chambers said the Help to Buy Scheme will be extended to the end of 2029.
The scheme is designed to help first-time buyers purchase a newly built house or apartment as well as one-off self-build homes. It offers a tax rebate of up to €30,000.
An increase in the rental tax credit has been announced, with this credit increasing by €250 to €1,000 for a single person or €2,000 for a jointly assessed couple.
The change applies to the rent credit in 2024 and 2025.
The Government has increased the first-year payment threshold in the research-and-development tax credit from €50,000 to €75,000.
In his speech, Finance Minister Jack Chambers said businesses “are the life-blood of our economy”.
He said his Department has extended the start-up entrepreneur relief and capital incentive to the end of 2026, while doubling the investment incentive to €1 million.
Mr Chambers said: “The Government was committed to “cultivating a thriving business angel-investment ecosystem” as he increased the lifetime limit on the Capital Gains Tax relief for start-up investors from €3 million to €10 million.
Finance Minister Jack Chambers has taken to the floor of the Dáil chamber to announce the details of Budget 2025.
Mr Chambers said Budget 2025 puts Ireland at a "firm footing for the future".
The recent disposal of part of the State’s shareholding in AIB, he said, has presented Government with an "immediate opportunity to allocate additional funding towards capital spending over the coming years".
"To this end, today, I am making available, €3 billion for infrastructure spending," he said.
"This will help build on current progress, eliminating key infrastructural bottlenecks more rapidly, and help lay the foundations for further improvements in living standards and competitiveness."
€1 billion he said will be provided to Uisce Éireann for non-domestic capital investment.
"This will allow for works to be carried out across the country on capital projects related to remedial action lists, connections for new housing and addressing urban wastewater pressures," Mr Chambers said.
He said a further allocation of €1.25bn would be allocated to the Land Development Agency to ramp up the delivery of housing, increasing their funding to €6.25bn in order to deliver social and affordable homes.
Mr Chamber also said that an additional €750 million funding boost will be injected into further developing the electricity grid infrastructure.
He said that “confidence” in Ireland’s ability to provide a secure, stable and green energy infrastructure is important for its future economic development and investment.
“The upgrading of this key element of our national infrastructure will be instrumental in ensuring our economy is ready for the next phase of its development.
“Providing a secure, sustainable source of energy will encourage further industrial investment, facilitate the progression of the digital economy, enable decarbonisation and enhance our competitiveness.”
Unprecedented investment in housing and infrastructure continues in #Budget2025
— Micheál Martin (@MichealMartinTD) October 1, 2024
Today we provide another €1.25bn in funding for the Land Development Agency to help deliver thousands of affordable homes, as well as €1bn for Irish Water for critical infrastructure.
Finance Minister Jack Chambers has said that the Irish economy is in “relatively good shape”, hailing a fall in inflation.
“Even as the headline rate of inflation has declined I am acutely aware that many are still struggling as price levels throughout the economy remain elevated,” he told the Dáil, arguing this is why there was a cost of living package as part of the Budget.
Budget 2025 he said has been designed to "strike the right balance" between the immediate challenges people are facing whilst making provisions for the future.
€4.3 billion, Mr Chambers said, was transferred into the Future Ireland Fund and €2 billion into the Infrastructure, Climate and Nature Fund in September.
A further €4.1 billion will be transferred to the Future Ireland Fund this year.
Transfers to both funds next year totalling approximately €6 billion, will mean by the end of next year, more than €16 billion will have been transferred to the funds, he said.
Minister Chambers said he is increasing the main tax credits, the Personal, Employee and Earned Income Credits, by €125.
The Universal Social Charge rate, Mr Chambers said, will be reduced from 4% to 3%.
The Standard Rate Cut Off Point will be increased by €2,000 from €42,000 to €44,000.
As of January 1, 2025, the national minimum wage will increase by 80 cent per hour to €13.50 per hour.
Minister @jackfchambers has announced a number of taxation changes to assist families. #Budget2025 pic.twitter.com/ckvHQO38Gr
— Department of Finance (@IRLDeptFinance) October 1, 2024
Mr Chambers also announced there will be changes to tax credits:
- Home Carer Tax Credit by €150
- Single Person Child Carer Credit by €150
- Incapacitated Child Tax Credit by €300
- Dependent Relative Tax Credit by €60
- Separately, the Blind Tax Credit will be increased by €300.
Tax cuts and child-related supports will be among the key measures unveiled in Budget 2025 amid the prospect of a winter general election in Ireland.
The Fine Gael, Fianna Fáil and the Green Party government is to unveil €8.3 billion worth of measures in the last of the coalition’s five financial packages.
Budget 2025, to be officially unveiled later today, is expected to include changes to income tax thresholds, a cut to the Universal Social Charge (USC), and an increase to the €750 renters tax credit.
Minister for Finance @jackfchambers is about to head to the Dáil to deliver #Budget2025.
— Fianna Fáil (@fiannafailparty) October 1, 2024
We in Fianna Fáil know that many of you are feeling the cost of living pressures and we'll be responding by helping you and your family, and putting money back in your pockets. pic.twitter.com/FbtZJpPdyb
The government will also announce a cost-of-living package including punter-friendly energy credits and two double child benefit payments.
A “baby boost” payment of €420 – suggested by Green Party leader and Children’s Minister Roderic O’Gorman to help parents with the costs of a newborn baby – has also been approved, along with a €15 increase in maternity and paternity benefit.
A disagreement on the scale of welfare payment increases surfaced in the media over the weekend, where it was reported Fine Gael was seeking a €15 increase to pensions alongside a lower hike for the jobseekers’ allowance.
Taoiseach and Fine Gael leader Simon Harris had said publicly that it did not make sense to spend significantly more on jobseekers’ allowance at a time when the economy is at near full employment.
Tánaiste and Fianna Fáill leader Micheál Martin dismissed the row as mischievous spin; he said that a €12 hike for all welfare payments had been “stitched in” for months and that differentiating welfare payments was not raised during budget talks.
Among the other notable measures included in the budget are free hormone replacement therapy from January, which could save women between €360 and €840 a year, and funding for 400 new staff and digital investment at the International Protection Office.
The government is also expected to outline how the €14.1 billion in Apple tax revenues should be spent.
€8 billion of the Apple tax revenue is expected to be received this year, contributing to Ireland’s total surplus of €25 billion in 2024, fuelled by multinationals’ corporation taxes.
The government has stressed that the Apple tax windfall and other surpluses will not affect the amount spent in Budget 2025.
The country’s fiscal watchdog has urged politicians not to repeat past mistakes, arguing that before the recession Ireland’s booming economy was exposed as vulnerable by overly relying on one sector.
But rumours of an election before Christmas, fuelled by flattering poll numbers for Fine Gael since Mr Harris took over as leader in April – who has the ultimate call on when to go to the polls, have raised accusations of a “giveaway” budget.
A general election must be held by March 22 at the latest and although many senior government ministers insist the coalition will go “full term”, there has been little clarity on what that means.
Speaking in an Instagram post filmed at 10.23pm on Monday, Mr Harris said that the budget aimed to help people with the cost of living – referencing supports for energy, fuel, education and child costs.
He said there would also be an infrastructure package focusing on housing, water and electricity, likely funded by Apple tax funds.
The budget is to be announced by Finance Minister Jack Chambers, followed by Public Expenditure Minister Paschal Donohoe, in the Dáil from 1pm today.
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